Why A Random Mona Lisa Provenance Will Not Matter On Blockchain
It’s not hype, but real world problem solved.
Note: I mention certain museum & artwork’s name to prove a point that blockchain provenance works. All rights belong to the museum and corresponding art owners.
You have to collect art to know why blockchain will solve the provenance problem that has been puzzling the art industry for centuries.
This excitement of potentially leaving a mark in the art history makes our team sleepless at night and keeps driving us to work a little bit more, explaining it a little bit more.
What happened
Recently, Mr.Terence Eden, a cool technology enthusiast and influencer has something to say about art blockchain company’s validity to putting physical artwork data on blockchain while maintaining its validity.
Terence uploaded photo of a Mona Lisa found on Wikipedia to Verisart, a fellow art blockchain company, generated a blockchain provenance record which claims he’s the “owner” of Mona Lisa. As we all know Mona Lisa is stored safely in Louvre and will never go on sale even if the whole France as a country goes bankrupt.
I will explain why Terence’s blockchain provenance record of the Mona Lisa will not matter. If you collect art, you already know why.
A quick answer:
In the art world, provenance matters more than anything, you need to prove you are the owner of that artwork in real life, and you need to prove where you gets that artwork from.
A random person’s on the street saying he has a Picasso will not matter a single bit, it has to be a verifiable art collector/gallery/organization saying so and provides clear provenance of that Picasso.
Provenance matters in a lot cases more than the authenticity of the work itself, because a trustworthy provenance indicates that someone else has already invested certain amount of capital into that Picasso, and if it can be traced back preferably owner by owner all the way to the artist studio, this artwork will worth more.
Now time to dig into key points from Terence’s article.
“Except… and I hate to bring the art industry into disrepute… what if I sell a fake and keep the original in my Underground Vault?”
If you buy art, you know that in the art world, a collector/gallery/auction house’s reputation is the utmost important thing. A collector’s reputation directly dictates whether a gallery will be willing to sell you the best work from its artists. Yes, there’re tons of people with money trying to buy major pieces with newly-minted wealth, but because their reputation in the art world has not been established yet, they can only buy smaller price works.
In the art market, you will not buy an artwork from just any random guy on the street or someone who suddenly popped out and says his father is a close friend of a famous artist and he “happened” to discover that artist’s Oil Painting from his father’s basement storage.
Sometimes the art world people believed those stories, and paid dearly for their consequences. (See Knoedler Gallery’s Mr.X, and how Beltracchis cheated the museums with their forged grandmother photos.)
The truth is, for each artwork you buy, you buy from a verifiable source, and this source’s validity and social status will add weight to this art you are about to collect. You buy work either from primary market (a reputable gallery or art dealer or private collector), or from the secondary market (a reputable auction house) but inevitably pay a higher buyer’s premium and face more price jump because more people will go after this work in the open secondary market. Just when you think you can scoop this Picasso lithograph for $5,000 in the bidding room, someone from Texas submitted a $5,500 bid from his or her bathtub while browsing the auction on phone. Happens all the time.
So If Terence uploads a fake Mona Lisa to the FRESCO platform and generates a provenance record on blockchain, this provenance record will not matter a bit, unless Terence can prove in real life that he is the physcial owner of this Mona Lisa.
I anticipate a lot of people finding Mona Lisa images online and trying to add to the platform, claiming their hands on the world class art. Feel free to do so. But only Lourve as a musuem uploads the Mona Lisa, generates a blockchain provenance in its FRESCO blockchain address, will it mean the real provenance of the artwork.
Now coming to the “sell the fake Mona Lisa and store the real one in the underground vault” part,
if you sell the fake Mona Lisa as the real one and transferred the blockchain provenance to the buyer, this fake Mona Lisa will be recognized as the only real one, because you as a Mona Lisa collector already put your reputation in this art transaction you conducted.
If you bring out the real one from the Vault and trying to sell it again, no one will buy it even in private. Because the fake Mona Lisa you sell is already branded by the buyer as the authentic work acquired from you. And the buyer who bought your vault storage will have to accept the fact that it will be a painting that will never be recognized as the real one.
Because the market already established the trust, by you, into that fake Mona Lisa. And if people discover what you have done, you are in bad shape, as the art world is a very close knit cirlce, your trust as a art collector will be gone and no one will do business with you ever again.
If you are an established collector, the artwork comes out of your collection carries your name’s weight, and if Terence is a world class collector with “Terence Collection”, any artwork Terence wants to sell, people will want to buy because the next time when they sell, they will show: “Look, Terence used to own it before, and Terence is an established individual, he acquired this work from Laurence, another well known collector from Manhattan, Laurence got it from Wendy, a prominent real estate magnate in Chicago, and Wendy got it from the artist’s first gallery show”.
In a sense, the artwork’s authenticity is directly linked with a collector/organization’s reputation. If you are willing to risk your reputation and sell a fake keep the real, good luck, now your fake becomes real, and the real will be viewed as fake, with possibility of being discovered by others in the art world and destroy your access to art forever.
“There’s no way to permanently attach a digital certificate to a physical work of art.”
Indeed, just like how there’s no way to attach a paper certificate to a physical work of art, which is done today by most art market participants when completing an art transation. If you buy art, the seller will provide you a very nice folder, containing a paper of provenance records showing who owns this painting before. If you buy it from a gallery or auction house, that paper may carry signature of the gallery or auction house’s director.
Yes, it’s already 2018 and Facebook is becoming obselete, yet art world still using paper as certificates.
And you already can see with only paper trail, fabrication of stories may occur, that’s why you have Mr.X from Swiss, my grandmother knows Rothko etc going on.
How to solve this while protecting the seller’s anonymity?
Can you use a way for an anonymous seller to prove that his artwork has good provenance without disclosing his own identity?
Yes, it is only doable, if the seller can show a transaction data of where he get this artwork data from. And if this data comes from a verifiable source, let it be another established collector, gallery, art foundation, or auction house, then another before.
This chain of provenance record, utilizing the existing art people’s put-forward trust, will build a web of trust, keep certain people’s identity completely anonymous while getting the job done.
Blockchain provenance record provides a reference for collectors to transfer their physical artwork while providing a traceable record, and just like art world today, it will be and need to be based upon the real world art owner’s reputation to back it up.
How do we find these key nodes who are willing to be open and let the world know their identity? While because there are plenty of art dealers and organizations want to sell artwork or facilitate sales of artwork. Just like how major galleries & auction houses all have verified social accounts.
If an anonymous blockchain address can show that his or her blockchain provenance data comes directly from any one of the verified art dealer, collector or oragnization’s blockchain addresses, this directly add validity to the artwork which in turn builds validity to the collector himself while keeping anonymity.
Mr.X will no longer be a singular node, but rather a point in the web that can be verified by other nodes he interacted with.
Everyone on FRESCO platform can upload a Mona Lisa, but only the Mona Lisa that comes from the Louvre’s FRESCO Blockchain address will be the authentic provenance. Just like Twitter, you will have verified accounts, along with a dozen spam ones.
Not saying Terence is spam account, just using it as a reference, explaining how the Lourve’s Mona Lisa data will be the one that matters on blockchain. It’s plain & simple. In the art world, what you are eventually accumulating, is your name as an art collecting individual, or organization. And you will be very careful to protect your reputation.
“Sure, you can slap a QR code on a crate — but nothing stops an unscrupulous middle-man from replacing or adulterating the contents of the crate.”
There’s no way to circumvent this, and in the art world people does not intend to. Yes you may have special pigments for painting or material for sculpture that can be traced, but good luck pushing it to a global scale. To make something widespread, you need to make it easy to use, can be used anywhere by anyone if they haves the need to use it. And with blockchain, we can use people’s instinct to serve each other’s self interest to build a globally trustworthy network. Nathaniel as as a collector will always make sure to upload his most prized artwork’s data on FRESCO because he wants to show off at this year’s Art Basel, proving that he indeed has a color of Rothko from well-established galleries’ FRESCO blockchain addresses. Kate as an art advisor will ask galleries & auction houses to first transfer the artwork’s data to her blockchain address, then she transfer that artwork data to her clients accompanying the transaction of the physical artwork so that Kate can build a reputable transaction record that’s globally viewable and to outsiders completely anonymous.
Moreover, with technology keep getting more advanced, the possibility of faking work will be a whole lot more easier year by year, what matters is still a collector’s real world reputation.
If you are an art owner and sell fake work with no one finds out, good luck for you. But if you flop once, even without knowing that the work is fake but people finds out from the improper provenance records, you will be gone from the art world.
As you can see, the top level artwork will only be circulating in a selected group of people and organization and are all traceable. Because when you try to sell a major piece for millions, people will want to know exactly who owns this work before you, before they invest their millions into this work. You need to provide auction house or gallery or the private dealer a very solid provenance record preferably all the way trace back to the artist studio.
The more expensive and significant the work, the more credibility and due diligence people will conduct to seek the most accurate provenance possible.
Da Vinci’s record breaking Salvador Mundi will be a great example to illustrate the importance of provenance. That masterpiece went from £45 to $450 Million in 59 Years because of the “all-star” provenance record.
People spent millions trying to find verifiable provenance for this work, without these painstaking research and arduous findings, this work will not achieve the $450 million epic price tag.
A couple tips for anyone who want to start art collecting:
Buy only from verifiable galleries, buy from the artists who are alive and you can build a connection with.
If buying from a passed-away artist, buy work that has clear provenance, best come from any socially verifiable influential individual or organization’s collection. If a work comes on market from a reputable museum like MET or MOMA, you buy without any doubt.
Next time you go to the museum, see on each tag whether each of the significant artworks is bequested by a family or organization that's influential in our world. Occasionally there will be anonymous donors, but people who makes decisions in the museum knows who that donor is.
Art has always been a form of asset allocation, even donation of art will bring benefits to the owner in form of tax deduction, increase of social prestige etc. It’s a part of the system to incentivize those with asset to build longlasting and profound cultural aspect for our society.
If the personal interest aligned well with the public good, you prevent the personal interest trying to go against the public good.
Mutual growth is key.
But, if it is certified on the blockchain, it must be true!
Not all data on blockchain needs to be true, it depends on who certified it on the blockchain. Blockchain provenance provides a digital & easy-to-transfer artwork ownership certificate for the art participants with established reputation. While the bad players does not have the right provenance to prove that they are a good player, even though one can generate the artwork data, but can you prove you own that art in the real life is going to dictate whether you can sell that artwork.
Just like if someone from the street says he bought an original Monet from a local antique shop, rarely anyone cares, unless you can verify its provenance.
I anticipates a lot identical Picassos uploaded by prank users, but only those who are known Picasso collectors in the art world,can their blockchain provenace records carry irrefutable weight.
Just like today on the internet we have a ton of garbage and misleading information and websites.
Blockchain is not the magic pill for preventing fraud and bad actors, rather it serves as a tool for good actors to pass on the trust, the good reputation, to verify new comers if they created transactions with the good actors.
This provides a referral system without everyone has to email back and forth and ask who Terence is and whether he is a good art collector.
Art world is quiet fun, and can seem secluded at times because you need to truly gain your way to it.
In the primary market, build connections with museums and art dealers, go to visit artist’s studio. Starting with small pieces, then gradually move to buying the major ones if you have the money.
In the secondary market, you just have to suck it up and acquire work facing a premium price & higher competition. For the power of provenance in the secondary market, I suggest you take a look at the Rockefeller auction done by Christie’s, every single thing got sold.
People are not stupid, they buy everything from the Rockefellers because next time when they sell, the provenance record will have the Rockefeller collection in it. This provenance carries significant weight that will make any potential buyer envious, because it means you acquired this work from one of the world’s best collector. The fact that this provenance comes from Rockefeller, already makes the work’s quality matter less, it’s the art owner’s namethat matters the most. Because the name represents the reputation, and that reputation directly link to whether the next people is willing to spend as much as you did or even more to acquire this work.
It’s quite late in Florence now, I had a blast viewing the fantastic collections at the Pitti Palace. It was the mansion once for the Medici Family, the most significant art patron in history. They directly supported and promoted a lot of artists to stardom, including Raphael & Michelangelo.
Terence, I will leave it right here for now. Just let you know that blockchain in the art world is not hype, but can solve problems that been puzzling the industry for centuries if done right.
This excitement of potentially leaving a mark in the art history makes our team sleepless at night and keeps driving us to work a little bit more, explaining it a little bit more.
I also attached what FRESCO is trying to do, have a quick look after reading this article, see if it make sense and whether you feel the same spark:
Sincerely,
Roy Huang
Co-Founder@FRESCO
